House committee approves PACT settlement fix

MONTGOMERY -- The House Ways and Means Education Committee today approved a bill intended to save a settlement for the financially troubled Prepaid Affordable College Tuition, or PACT, program, that the state Supreme Court rejected last month.

The committee also discussed, but did not vote on, a proposal to allow for the creation of charter schools in the state.

The PACT bill removes references, added to state law in 2010, to the program being "fully funded," a key objection that the Supreme Court noted when it tossed the compromise plan. The bill by Rep. Jay Love, R-Montgomery, would also remove tuition caps that the 2010 legislation put in place for some universities in the state.

The compromise rejected by the high court was developed as a settlement to a lawsuit filed by parents and grandparents enrolled in PACT, a state college tuition investment program, which, due to rising tuition prices and falling investment values, is on track to go bust in three years, according to state Treasurer Young Boozer.

Testifying in favor of the bill, Boozer told the committee that he thought House Bill 603 would remove the Supreme Court's objections and allow for the settlement's approval.

"I believe that the vast majority of the people who are contract holders today want the settlement to ... be in place," Boozer said. "This is how we get the settlement in place, by clearing these obstacles."

Committee members approved a substitute version of the bill that included minor changes and passed the proposal 9-5, largely along party lines.

Rep. Craig Ford, a Gadsden Democrat who has sponsored his own legislation to address PACT problems, opposed HB 603, saying the settlement it would aid does not do enough for people enrolled in PACT. That settlement would cover the cost of tuition at 2010 levels but require families and students to make up for the difference created by any tuition increases.

"We have a duty and an obligation to fulfill these contracts to these parents and to these children in the state of Alabama," Ford said. "This bill ... I think all we're going to do is pass another piece of legislation that's going to get tied up in court again, and we're going to not fulfill the promise that we made to these people."

Ford told the committee that he'd spoken with two attorneys who vowed further court action on the settlement.

Love said he hopes to pass the bill quickly and will press to get it considered before the full House on Thursday.